Tax advice from a computer: Do you need tax software? Five questions to ask.

ByMary Helen Miller, CorrespondentApril 7, 2011

Tax advice comes in many forms: from IRS forms, accountants, and tax preparers. So do you need a computer to fill out your forms? Most low- and middle-class Americans qualify to use tax software for free. But if you have to pay for it, is the software worth it? Here are a five questions to help you decide:

1.
How much money do you make?

If your adjusted gross income is below $58,000, you can opt to file for free with tax software from a long list of companies. But two-thirds of Americans who file electronically prefer to rely on a professional for tax advice and preparation rather than on a computer and do-it-yourself software.

Tax software is an especially interactive way to dispense tax advice. Several years ago, the IRS enlisted a few tax-software companies, including TurboTax and CompleteTax, to offer free filing of federal returns for people with adjusted gross income below a certain amount. This year, the cutoff is $58,000, which would allow about 70 percent of all taxpayers to file for free. Taxpayers in that category can choose to file using one of 17 companies listed on the IRS’s website. In most cases, however, taxpayers cannot use the software to file state tax returns for free.